Question 1

Who prepares the P&L statement?

Accepted Answer

A licensed CPA must prepare and sign it. Self-prepared P&L statements are not accepted by lenders.

Question 2

Do I need tax returns for a P&L loan?

Accepted Answer

No. That's the point. The P&L replaces tax returns as the primary income document.

Question 3

How far back does the P&L need to go?

Accepted Answer

Most lenders want 12 months minimum. A 24-month P&L shows more stability and usually gets better terms.

Question 4

Can I use a P&L loan to buy in SF with a jumbo loan amount?

Accepted Answer

Yes. Several non-QM lenders offer P&L loans in jumbo amounts. Expect stricter credit and reserve requirements.

Question 5

Are P&L loan rates higher than conventional rates?

Accepted Answer

Yes, typically. Non-QM products carry a rate premium over conventional loans. Rates vary by borrower profile and market conditions.

Question 6

What reserves do lenders require?

Accepted Answer

Most non-QM lenders require 6-12 months of mortgage payments in reserves. Higher loan amounts often require more.

P&L Loans for San Francisco's Self-Employed